Bus aggregator Shuttl forays into food delivery space

After a pilot started in October last year with 50 buses, the Gurgaon-based company plans to scale up the offering this year by providing meals on 1,200 buses, most of which operate in Delhi NCR.Aditi Shrivastava | ETtech | Updated: March 30, 2019, 09:40 IST

India’s largest bus aggregatorShuttl has entered the hotly contested food delivery space by launching meals on busses for daily commuters, as it looks to further monitise its captive customer base.

After a pilot started in October last year with 50 buses, the Gurgaon-based company plans to scale up the offering this year by providing meals on 1,200 buses, most of which operate in Delhi NCR.

“Our customers are demanding food to be served on buses. The metric we track, ie Items sold per ride, show that about 90% of the people are buying something which validates that there is a consumer demand for it….we are working with cloud kitchens and building an ordering product to scale this offering,” Amit Singh, cofounder of Shuttl, said, adding that the service would target commuters who on average use the Shuttl service 22 times a month.

The company expects to break even at an operating level in about a month on the back of an increase in prices, bigger bus es, and improved occupancy levels.

Selling daily essentials on buses like bread, butter, curd, eggs and milk would be the next step for the startup, Singh said.

Shuttl is an app-based bus-pooling service mainly used by office-goers. People can book the service by selecting the boarding point and drop points on their app, track the buses in real-time and make online payments.

According to industry estimates, about 150,000 private buses ply in the country with some 70 million people using them every day. However, private bus aggregation has been a tough business to crack owing to the complexities involved in operations. These include optimising of routes, creating efficiencies and regulatory scrutiny around the business model. Ola, which had started the service in 2015, shut down the offering last year.

“We took our time in Delhi NCR, figured out how to launch routes, scale routes and what is the basic experience required in the offering, and frequency. Now we are in the growth phase,” said Singh, adding that “30% customers take more than 30 rides in a month, and such high frequency is unprecedented in transaction internet businesses”.

This year, Shuttl expanded operations to Kolkata, Hyderabad, Pune and Mumbai. However, 80% of the company's business is still from Delhi NCR. The company does about 60,000 rides per day.

In July last year, Shuttl, owned by Super Highway Labs, had raised $11 million (Rs 76 crore) in a funding round led by Amazon India, Amazon Alexa Fund and Dentsu Ventures. The company’s earlier investors include Sequoia Capital, Times Internet and Lightspeed Ventures. However, since that round, the company has raised about Rs17 crore in debt from Trifecta Capital.